New forecasts by Cebr – the Centre for Economics and Business Research – show that UK house prices will grow by 4.4% in 2017 – the slowest rate since 2013.
This forecast, part of the consultancy’s Housing Prospects publication, sees growth at below 5% for the next two years until activity in the housing market is expected to pick up again. Cebr reports: ‘After a turbulent 2016, initial data for Q1 2017 suggests that the property market is moving along at a steady if unspectacular pace. Mortgage approval numbers, a leading indicator for property transactions, have recovered from their mid-2016 low and remain on a stable level of close to but just under 70,000 per month. While this is a low figure compared to the historical average, it is near the post-crisis high of 74,000 seen in early 2014. Though the number of mortgage approvals dipped slightly in February, secured borrowing continues to benefit from low mortgage costs after the Bank of England cut interest rates in response to the result of the EU referendum last summer.’
However, looking at the market fundamentals, the shortage of suitable housing continues to exert pressure on property prices, Cebr added.